The 2012 tax-filing season is heading into its last month and that means people are frantically looking for ways to reduce their tax bills.
One income reporting situation could throw a wrench into some filers' tax-cutting efforts. Another, more helpful, filing circumstance is becoming more common. Both got a closer look last week at my other tax blog.
First the bad news. Even if you don't get a 1099-MISC for work you did, you must report that income. If someone tells you that earnings of less than $600 are tax-free if you don't get a tax statement from the employer, that person is wrong. I heard a so-called money expert on a network TV program make this very mistake last week.
The unwelcome truth is that the $600 cutoff amount that you often hear bandied about is for reporting purposes only. An employer doesn't have to issue you the tax statement if you made less.
You, however, still are legally required to report all your income, regardless of how little each individual payment might be.
The better news last week at my other tax blog was that an adult son or daughter who's moved back home because of the tough economy might turn out to be a tax break for his or her parents.
Under certain circumstances, you can claim a grown child as a dependent. That means you also get an added exemption deduction for that person.
You can check out new posts each Tuesday and Thursday at my Bankrate Taxes Blog. And if you happen to miss them there, you can find a wrap-up here each Saturday.
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